March 14, 2017
The Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) has published the final report from its Inclusive Growth Commission. The report sets out a series of recommendations which it claims will address the lack of an inclusive approach to the economy. In the context of Brexit, this is one of the underlying drivers of dissatisfaction with the way the UK is run by central and local government, the report claims, and hence a factor in the Brexit vote. Its forward looking proposals include a greater commitment to lifelong learning, a greater focus on place to ensure the UK’s cities and regions get a greater stake in the national economy. As well as the main report, its conclusions and proposals are discussed in a podcast.
“We have a better chance of raising our productivity and doing better in world markets if we invest more effectively in our people and places and, yes, give them a greater sense of ownership and control”, the authors suggest. “But turning our back on our past strengths is not a sensible option either. We will not have the resources to build a more balanced and inclusive society if we cause wanton damage to our economy now by shutting our borders and cutting off old ties.”
The report is based on evidence reviewed by the Commission through the course of its inquiry, which included evidence hearings, written submissions, research visits, seminars and policy and citizen engagement. It sets out a framework and recommendations for achieving inclusive growth. These are addressed equally to central government and to councils and UK city regions, many of which are on the threshold of important metro mayoral elections.
The Commission proposes four key sets of recommendations for putting inclusive growth at the heart of public policy and finance:
Place-based industrial strategies: Delivering business-led productivity and quality jobs. The Commission recommends:
- City regions work together to form sectoral coalitions linking industry sectors and places in order to modernise industrial strategy.
- The creation of new institutions or civic enterprises to connect business and industry, training providers and universities.
- That cities become places of life-long learning, with a commitment to human capital development from ‘cradle to grave.’
A fundamental reset of the relationship between Whitehall and the town hall, underwritten in new social contracts. The Commission recommends:
- National standards with local flexibility so that combined authorities are able to pool budgets and co-commission public services for their place.
- Immediate, pragmatic action to spread co-commissioning – applying Greater Manchester’s model of joint place-based service commissioning for health and social care to other mayoral combined authorities and other public service areas such as education, skills and employment support.
- Maximising impact from total local resources. Over the long term, places with mature governance should take on full responsibility for the economic and social outcomes of their place, enabling local coordination of all public spending.
- Place-based budgeting and spending reviews that attribute the total amount of public sector spending and investment to places rather than departmental siloes.
Inclusive growth at the heart of public investment. The Commission recommends:
- Central government establish a new independent UK Inclusive Growth Investment Fund, incorporating repatriated ESIF funds and other relevant funding streams. Applications for funding would be based on their expected impact on broad based ‘quality GVA’ and the Fund would be overseen by a multi-stakeholder board.
- Central government should explore and encourage the establishment of regional banks.
Making inclusive growth our working definition of economic success. The Commission recommends:
- Central government commission an assessment of the social infrastructure gap
- Maximising the impact of national and local investment by mainstreaming inclusive growth in all public investments including physical infrastructure projects.
- Establishing inclusive growth as a regular, official statistic by publishing a quarterly national measure of inclusive growth alongside GDP.
- Places should define and be accountable for agreed inclusive growth metrics, and these should form part of the Gateway Reviews for mayoral investment funds.
- An appropriate evaluation timeframe should be developed as part of the new social contracts negotiated between city regions and central government.